The performance management puzzle

Some say traditional ways of managing employee performance are irrelevant in today's fast-changing work environment. Others argue that these methods drive accountability and differentiated compensation. Both are right.

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Current performance management systems are receiving a failing grade. Yet, year after year, managers fill out goal forms, track progress, conduct a formal annual assessment, and then fill out more forms. But when it comes to motivating and engaging people, these conventional processes seem increasingly obsolete.

While the way work gets done has changed dramatically over the last few decades, most performance management processes have remained essentially the same. In this new world of work, team relationships often influence an individual’s performance more than a supervisor. For team members, on-the-spot improvements based on immediate feedback from their peers can have a big impact on performance. Plus, the fiscal year is increasingly becoming less relevant as goals are increasingly tied to project. Add in the matrix organization, and performance management can turn into chaos.

What has not changed is what leaders and employees want from performance management: A broad view of the organization’s human resources and a fair and valid assessment process, respectively. To achieve these somewhat paradoxical goals, some leading organizations are ushering in a new era of workplace democracy and leveraging social tools to access in-the-moment feedback. While no single answer has emerged, the search for innovation in performance management is accelerating.

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